A whale increased his long exposure to Bitcoin and Solana on Thursday, July 2. Whale has put more than $70 million on the line.
Additionally, the investor opened a 10x short position in Hyperliquid (HYPE), bringing the total bet to over $78 million.
Initially the bet appears to be going well, resulting in unrealized profits of approximately $9.2 million.
Unrealized positive PNL (profit and loss), US Jobs report weakening data. In most cases, weak Jobs report data suggests the Fed will reconsider its earlier push for rate hikes to stimulate the labor market.
As a result, the prospect of any rate cut by the Fed tends to increase risk appetite, sparking a relief rally in crypto and equity markets. In fact, the stock market posted mixed results.
As of this writing, Google Finance has shown that S&P and Nasdaq Futures are in the green, indicating that the recovery could move higher.
Will the Fed ruin Bitcoin and Solana’s recovery?
Still, the Fed’s interest rate expectations haven’t changed much after the weak Jobs report. According to the FedWatch tool, the probability of another rate hike has fallen almost 2-fold, from 28% to 17%.
In effect, this eased interest rate hike fears and likely fueled a mid-week relief rebound as BTC climbed to $62k. However, decreasing fears did not mean an automatic interest rate cut.
Rate traders were estimating an 83% chance that the Fed would keep the interest rate unchanged at its current 3.50%-3.75% level ahead of its late July meeting. After the July 4th weekend, the FOMC Minutes will be released next Wednesday, July 8th.
Low liquidity over the weekend and upcoming FOMC Minutes could still trigger market volatility.
In fact, as of this writing, the whale was already down $1.2 million, largely driven by the HYPE short position, which was down 70%. The Fed’s pause on hawkish interest rates would likely leave the whale facing further losses.
Meanwhile, smart money investors were doubling their investments. Solana (Sun) at the current level of $81. This group increased bids by 129% in the last 24 hours.
What’s next for Bitcoin, Solana?
But for Bitcoin, short positions were piling up as the king cryptocurrency tried to reclaim $62,000. There was over $2 billion in short positions and a command of 57% as of this writing.
This meant: Bitcoin (BTC) Investors turned increasingly downward after the relief towards $62,000. It also creates the best conditions for a short squeeze. But that depends on how the market reacts to the FOMC Minutes.
Still, the overhead hurdles of $62.3K and $65K must be overcome for a sustainable recovery.
Final Summary
- A whale raises his long-term exposure to Bitcoin and Solana to over $70 million after weak US jobs report
- A hawkish interest rate pause could renew market selloff as Fed rate hike fears ease
